The NZDUSD opens at 0.8170 this morning.
The USD fell across the board yesterday, which pushed the NZDUSD above 0.8200 for the first time since May, after former US Treasury Secretary Lawrence Summers withdrew his name from contention to be the next Chairman of the US Federal Reserve.
The NZD could not sustain the rally overnight, and was subsequently sold lower, but remains underpinned by last weeks RBNZ statement which indicates interest rate hikes early 2014.
Summers, Obama’s favoured candidate, was perceived to be wanting less monetary policy accommodation than other candidates. Hence, the USD weakened, bond and equity market rose on news of his withdrawal.
The US Fed is expected to announce USD$10-15 billion tapering from its currently USD$85 billion monthly bond-buying program at its eagerly anticipated interest rate meeting to be held Thursday morning NZ time.
Global equity markets were mostly higher on the day – Dow +0.8%, Nikkei +0.1%, Shanghai -0.4%, FTSE +0.6%, DAX +1.2%
The Gold Price was fell 1.3% USD$1309 an ounce. Oil dropped 1.8% and base metal prices were mixed, with Copper & Nickel rising on the day.
The NZD opens at 0.8170 USD, 0.8765 AUD, 0.6125 EUR, 0.5140 GBP, & 80.95 JPY.
There is no data on the domestic calendar today.
Australian RBA Monetary Policy Meeting Minutes & New Motor Vehicle Sales hit the tapes at 1:30pm, followed by a Leading Index and (possibly) Foreign Direct Investment out of China.
UK Inflation, German Economic Sentiment, and US Inflation figures will be released overnight.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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